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Toyota is Now Testing New Prius That Uses Ultra-Thin Solar Panels to Charge Batteries On the Go

Toyota has begun testing a new Prius model that uses ultra-thin solar panels to eliminate the risk of a car running out of juice on the road.

The company announced earlier this week that they plan to commence public road trials from late July 2019.

The trials, which will be conducted in collaboration with the New Energy and Industrial Technology Development Organization (NEDO) and electronics corporation Sharp, aim to assess the effectiveness of improvements in cruising range and fuel efficiency of electrified vehicles equipped with high-efficiency solar batteries.

To facilitate the execution of this trial, Sharp modularized its high-efficiency solar battery cells (with conversion efficiency of 34%), previously developed for a NEDO-led project, to create an onboard solar battery panel.

The solar battery cell is a thin film about 0.03 mm in thickness, which makes it possible to efficiently install to fit the curves of vehicle parts with limited space.

Toyota then installed this panel on the roof, hood, rear hatch door, and other parts of its “Prius PHV” and produced a demo car for public road trials. By enhancing the solar battery panel’s efficiency and expanding its onboard area, Toyota was able to achieve a rated power generation output of around 860W, which is approximately 4.8-times higher in comparison with the commercial model Prius PHV (equipped with a solar-charging system).

In addition to substantially boosting its power generation output, the demo car employs a system that charges the driving battery while the vehicle is parked and also while it’s being driven – a development that is expected to lead to considerable improvements in electric-powered cruising range and fuel efficiency.

Toyota plans to conduct the trials under various driving conditions in Toyota City, Aichi Prefecture, Tokyo, and other areas. Various data, including the power generation output of the solar battery panel and the amount the drive battery is charged, will be obtained and verified, and then used in the development of an onboard solar recharging system.

The PV-powered Vehicle Strategy Committee, which NEDO launched in 2016 in collaboration with several other entities, will evaluate the benefits based on improvements in CO2 emissions reductions and convenience, such as the number of times a vehicle requires recharging.

09 July 2019 | Good News Network

Ultima Media hires automotive analyst

Daniel Harrison is joining the B2B media business which owns a portfolio of brands and channels including Automotive Logistics, Automotive Manufacturing Solutions, Car Design News and automotiveIT International

Harrison, an experienced market researcher and analyst, will work with Ultima Media’s editor-in-chief, Christopher Ludwig, to help shape the creation of a new business intelligence offering, providing insight, data and analysis relevant to the company’s four B2B automotive media platforms (Logistics, Manufacturing, Design and IT).

Harrison will take a lead on sourcing and analysing data, producing trend insights, market reports and forecasts that will be shared and distributed across all relevant B2B automotive brands and channels – including Automotive Logistics’ publications and events.

More specifically, Ludwig and Harrison will develop an automotive business intelligence unit that will provide deep analysis on the fast pace of change across the automotive value chain. Focus areas will include how vehicle electrification is changing manufacturing and logistics, ways that design and technology is reshaping customer and user experience, developments on pricing and cost across the supply chain, and much more.

The unit, created as part of managing director Gavin Miller’s business strategy, will work closely with the editors and business directors of Automotive Logistics, Automotive Manufacturing SolutionsAutomotive Logistics, automotiveIT International and Car Design News to identify trend and analysis topics. For Automotive Logistics and Finished Vehicle Logistics, this will include working closely with editor Joanne Perry and publishers Louis Yiakoumi and Matt Allard.

Each of these brands already has significant global audiences and deep networks of key decision makers, suppliers and solutions providers in their disciplines.

Harrison brings more than ten years’ experience in research and market intelligence, having led on the production of in-depth market reports, with specialist focus on the automotive and electronics sectors, as well as experience in aviation, cybersecurity, IT, telecommunications and more. He was most recently head of reports for Visiongain, where he oversaw the production of 200 market intelligence reports annually. He was also the lead analyst for the company’s automotive reports.

Harrison said: “I’m delighted to be joining Ultima Media, a business in transition, with the objective of helping global B2B automotive operators grow their business through data, insight and intelligence. The rapidly changing global automotive landscape requires a very real focus on providing the market, our audience and our customers with analysis, data and intelligence and I’m delighted to be joining the business at the start of that journey.”

Christopher Ludwig pointed to rising demand for trend analysis and insight that goes beyond headlines and buzzwords. “Our audiences and partners tell us that they want practical, data-driven insight to help them navigate and understand a complex and changing market, whether that is capitalising on opportunities in connected technology, designing products to keep pace with global markets like China, re-evaluating the automotive supply chain or dealing with margin pressure,” said Ludwig.

“Daniel brings to Ultima precisely the analytical, research and data skills that we need to help our audience and commercial partners to navigate through these challenging but exciting times.”

About Ultima Media
Ultima Media’s automotive manufacturing, logistics, design and IT Technology platforms each provide the industry and its audiences with global news, stories, insight, intelligence and connections, 365 days a year. Our portfolio of magazines, websites and events channels underpin each of our platforms to inform, educate, inspire and make connections, whether you are a vehicle-maker, parts supplier, service, software or equipment provider across the supply chain, logistics, design or IT value chain.

Ultima Media is owned by Süddeutscher Verlag and the SWMH Group, one of Germany’s leading publishing, media and services company. Its portfolio includes national and regional newspapers, including the renowned paper of record, Süddeutsche Zeitung, as well as international B2B media and professional services.

25 June 2019 | Automotive Logistics

https://www.automotivelogistics.media/ultima-media-hires-automotive-analyst/38561.article

Automotive industry condemns tariff ‘secrecy’

Automotive sector bodies from the US and overseas have rounded on the US Department of Commerce for not giving them access to its report for Donald Trump about possible duties on imports of automotive goods.

Trump requested the report in May last year as part of a Section 232 investigation, which authorises the president to apply tariffs (or other means) to adjust imported goods if they are deemed to threaten national security. There is speculation that the levies recommended could be as high as 25% for vehicles and parts.

The report was delivered on February 17 and Trump now has 90 days to decide how to act.

A number of associations representing the automotive industry have complained that failure to disclose the figures is fuelling uncertainty, threatening businesses and jobs.

The Motor and Equipment Manufacturers’ Association (Mema) said it was crucial the automotive industry had the opportunity to review the recommendations and advise the White House on how the proposed tariffs could “put jobs at risk, impact consumers, and trigger a reduction in US investments” – impacts it said could set the industry back decades.

“Secrecy around the report only increases the uncertainty and concern across the industry created by the threat of tariffs,” stated Mema, calling for the immediate and full release of the report. “The ongoing uncertainty due to changing trade policies is already discouraging new investment, and additional tariffs from the 232 auto investigation will hinder future investment even more.”

Echoing Mema’s point, John Bozzella, president and CEO of Global Automakers, which lobbies for some of the foreign OEMs with plants in the US, added: “The prolonged uncertainty about these tariffs freezes investment decisions, makes planning for the US-Mexico-Canada Agreement [USMCA] next to impossible, and does incalculable damage to the US auto industry.

“Automotive trade does not imperil national security,” he added. “It strengthens our competitiveness and benefits consumers.”

National insecurity
Interest groups from overseas have also expressed their concerns. Erik Jonnaert, secretary-general of the European Automobile Manufacturers’ Association (ACEA), said imports of cars and parts from the EU clearly did not pose a national security risk to the US and any restrictions on trade would have a serious negative impact on both US and EU manufacturers.

European carmakers produce close to 1m vehicles a year in the US, of which roughly 60% are exported. EU manufacturers also directly and indirectly employ more than 470,000 Americans, according to ACEA.

All carmakers in the US, whether domestic or international, would face a significant increase in costs and Jonnaert said there was the possibility of higher repair costs being passed on to consumers.

“Such measures would make American automobile manufacturing less competitive and hit US consumers in their pockets. In other words, the imposition of tariffs would have a counter-productive effect on the US economy,” said ACEA.

Germany’s Association of the Automotive Industry (VDA) said it was incomprehensible that the US could label European car and parts imports as a danger to US national security, meanwhile. German Chancellor Angela Merkel said it was frightening the US was even considering the possibility.

German OEMs and component-makers have around 300 factories providing jobs to more than 113,000 people in the US, according to the VDA.

Job losses
Mema pointed out that the automotive supplier segment directly employed more than 870,000 US workers, with a total figure of 4.26m jobs reliant on it through the wider supply chain. Furthermore, suppliers account for the largest segment of manufacturing jobs in the nation and generate 2.4% of its GDP.

“Many suppliers import certain automotive parts (including electronic control units, bearings and valves) as inputs that are then manufactured into higher technology or more complex parts here in the US,” stated Mema. “Open markets and integrated supply chains provide a proven framework for economic growth and jobs in our industry.”

The imposition of tariffs comes at a time when raw materials are already being taxed, with the US applying duties of 25% on steel imports and 10% on aluminium. Mema said further levies on vehicles and parts could add $7,000 to the cost of a car.

Threat of retaliation
The American Automotive Policy Council (AAPC), which represents US carmakers FCA, Ford and GM, said any levies would probably encourage retaliatory tariffs against exports of US-made cars and undermine, rather than help, the economic and employment contributions the three companies made to the US economy.

Meanwhile, the Alliance of Automobile Manufacturers (AAM), which represents domestic and foreign carmakers, said import duties would be a tax “on our customers” and that higher duties would ultimately lead to the loss of “hundreds of thousands of US jobs”.

The AAM’s suggested solution is for Washington to conclude trade pacts with key partners such as the EU, Japan and the UK, and explore additional market access opportunities for US automotive exports.

US administrators have said tariff threats on cars are a way to win concessions in trade talks with Japan, the EU, Canada and Mexico, and that Trump has agreed not to impose automotive duties as long as talks with those trading partners proceed in a productive manner.

This week, Japanese and European policy-makers reiterated their belief that this was still the case. European Commission president Jean-Claude Juncker was quoted by German daily newspaper Stuttgarter Zeitung as saying: “Trump gave me his word that there won’t be any car tariffs for the time being. I view this commitment as something you can rely on.”

In recent days Trump tweeted: “I love tariffs, but I also love them to negotiate.”

20 February 2019 | Steve Garnsey | Automotive Logistics

https://automotivelogistics.media/news/automotive-industry-condemns-tariff-secrecy

Automotive trends to watch in 2019

Overall vehicle sales leveled off by the end of 2018, but investments in autonomous technology and the electrification of vehicles are providing the industry a look at what could be expected in the future. Regulations on emissions standards are putting pressure on manufacturers, adding to production costs that rose with the advent of tariffs on steel and other commodity components.

New mobility business models such as ride hailing and car sharing are poised to disrupt car ownership, personal mobility and goods logistics. The timeline for SAE-level 4 and 5 autonomous vehicles keeps accelerating as economics and technology fall into place, although local safety regulations may slow their rollout. Artificial intelligence offers almost limitless possibilities, while connectivity-enabled technologies are reaching mainstream application. Momentum for electrification is building among OEMs due to increasing emissions regulations pressure and accelerating technology advancement.

Following are highlights of what automakers and suppliers can expect in the next 12 months.

Growth

Vehicle sales fell in 2018, closing out the year lower overall than 2017. According to Trading Economics, U.S. vehicle sales for December came in at 17.5 million, slightly higher than the same period in 2017 but well below the high of about 18.2 million in September of 2017. By November, light trucks led auto sales by about 3-to-1 in the United States,1 a trend likely driven by crude oil prices that have dropped more than 50 percent in the last five years.2 Total vehicle sales are projected to trend around 17.3 million in 2020. Orders for trailers, however, set a record pace in November, which saw the highest growth for orders since 1994.3 This trend is expected to continue well into 2019.

The leveling off of vehicle sales was due in part to the continuing rise in the use of ride sharing and ride-hailing services such as Uber and Lyft. Revenue for these services is expected to show an annual growth rate of 11 percent by 2023, according to Statista. The United States is second only to China in market volume for ride hailing.

In addition, the rising cost of producing vehicles is having an impact on overall sales. In 2018, the average transaction price for light vehicles in the United States increased 2 percent over 2017.4 Domestic automakers are also seeing a significant reduction in their global growth potential due to lower consumer spending overseas, particularly in China. Tariff uncertainty has OEMs adopting increasing prices, closing down production or shifting production to more favorable locations.

The automotive revenue pool will significantly increase and diversify toward on-demand mobility services and data-driven services. Despite a shift toward shared mobility, however, vehicle unit sales will continue to grow, but likely at a lower rate of about 2 percent per year. New mobility services may result in a decline of private vehicle sales, but this decline is likely to be partially offset by increased sales overall. The remaining driver of growth in global car sales is the overall positive macroeconomic development, including the rise of the global consumer middle class.

Technology

While U.S. automakers are expected to see a decline in growth over the next few years, investments in autonomous technology and the electrification of vehicles could point the way toward future growth. This will be a long-term strategy, with regulatory hurdles to overcome for autonomous vehicles. The emergence of software as a key differentiator will make many existing competencies obsolete and create more intensive competition from new tech players.

The lack of regulatory consistency across the United States, however, coupled with some push-back by a cohort of workers that may see their jobs being taken away, suggests that the arrival of autonomous vehicles as a ubiquitous presence on the nation’s highways may still be years off.

Regulations mandating lower emissions standards also may drive investments in electric vehicles. Emissions standards at any level will have little effect on EVs driven by their fuel cell powertrains, that is, their rechargeable electric batteries. That said, lower gas prices have pushed sales of SUVs and other large, gas-powered vehicles. Beyond emissions standards, however, fuel prices are cyclical and historically have a way of rising as well as falling, a trend that OEMs may be counting on to justify the long-term investments in EV development. Investment in EV technology will also help maintain the global competitiveness of U.S.-based OEMs.

Moreover, auto manufacturers and suppliers also have a unique opportunity to increase their research and development tax credit by considering an underutilized provision associated with tooling costs. These new tooling costs may be claimed in addition to other qualified supply expenses resulting from new product development, product improvement and process improvements. The inclusion of tooling costs has the potential to greatly increase an R&D credit.

In any case, if suppliers are to stay ahead of the curve, they will need to make strategic investments in technology R&D, either on their own or through joint ventures. Some suppliers may need to expand their portfolios, investing in noncore types of businesses in order to manage their margins and profitability. Ultimately, the industry may see some consolidation.

Tariffs, trade and regulations

According to the OESA Automotive Supplier Barometer, government trade policy changes continue to be the greatest industry threat. With so many levels of compounding uncertainty—prompted by steel and aluminum tariffs that effectively add more costs to the supply base, and the uncertain future of the USMCA agreements—suppliers are delaying investments and cutting R&D. This, in turn, could have an impact on jobs and making suppliers far less competitive. Suppliers may have to reconsider sourcing their supply chains domestically, if possible, and some may have to shift production outside of the United States.

The impact of tariffs, customs and duty taxes, and value-added taxes is undoubtedly felt by suppliers on every tier. But some tiers will be affected more than others. Tier 1 suppliers suppling OEMs with complex component parts will likely have opportunities to renegotiate contracts with OEMs to maintain profitability.

A volatile tariff and tax environment may hit Tier 2 and 3 suppliers hardest. These companies, running on thin margins, may be more exposed to risk, and their profitability metrics may put into question the long-term viability of their businesses. Without tariff relief or rate reductions, some suppliers may consolidate with others; some may disappear entirely.

Operations and costs

The valuation multiples of suppliers are on average about twice the level of OEMs. For OEMs, there is a risk of market share loss brought on by new competition from technology companies entering the industry space. There is also a risk of profit share loss to companies that are evolving as they begin to offer technology and software products. Investors note this disruptive environment and value the automakers accordingly.

But supplier valuations, on average, may be less affected by this disruption. The demand fulfilled by those that supply complex components will still exist regardless of the automaker producing the vehicle. While this may be good news to supplier management and their shareholders, it may also put suppliers at risk of being acquired by private equity investors.

The potential downswing of valuations for commoditized suppliers, however, might support growing investor pressure to increase shareholder value. These suppliers face greater competition; lower profitability and decreased valuation put their access to capital at risk. Banks will be less inclined to offer loans at attractive rates if value and profitability are down. Terms will change and interest rates will go up. To survive, these suppliers may need to rethink their business models.

Suppliers will need to continue to assess and monitor required investments in technology, the impact of regulatory emissions requirements, costs associated with changing model designs, tariff and other costs to produce.  Balancing these investments and costs in the global competitive landscape will have a critical impact on the long-term valuation multiples of suppliers.

Workforce

With the decline in sales, automakers are being more proactive in their strategic decisions than they may have been in 2008 when many were on the brink of bankruptcy. To avoid that scenario, a number of major OEMs have made headlines as they have idled plants or cut thousands of jobs worldwide. The writing on the wall says there is more idling and cutting to come.

While closures and cuts may be due to changing consumer demands, education and retraining are often the go-to solutions for workforce personnel who suddenly find themselves out of a job. Some OEMs and suppliers may bring previously outsourced operations back in-house, allowing the company to retain some of its workforce and ensuring some consistency and knowledge retention. This may work for some percentage of the workforce, but another segment may not be able to afford to wait to acquire a new degree or skills. Not everyone can be an engineer.

Those who are hiring are finding it difficult to find the right talent. OEMs are building up their capabilities around new technologies, increasingly fighting with the IT and consumer electronics industries for software and engineering talent. A new culture may be necessary to successfully integrate these new competencies.

1 “United States light vehicle sales in November 2018, by type” Statista.com.
2 Macrotrends.com
3 “Trailer Orders Stay High in November” (Dec. 17, 2018) Truckinginfo.com.
4 “Average New-Car Prices Rise 2 Percent Year-Over-Year” (Oct. 2, 2018) Kelley Blue Book.

11 February 2019 | Lawrence Keyler | RSMUS.com

https://rsmus.com/what-we-do/industries/industrial-products/automotive/automotive-trends-to-watch-in-2019.html?cmpid=OESA

How the Auto Industry Is Shifting Storytelling Gears—Thanks to Millennials

Windows rolled down, music blaring, car packed with friends (or just that special someone). If the image of the car as a ticket to freedom appeals to you, well, let’s just say you’re probably not that young anymore.

For young people today, the old auto industry narrative about The Car—emblem of coolness, inspiration for countless songs and movies, and pathway to freedom from authority figures—has come to a screeching halt. These days, many teenagers and young adults would rather grab a ride from Mom or Uber instead of getting behind the wheel themselves.

The trends are forcing automakers to rethink their millennial marketing strategies and brand story. When industry disruption upends a narrative that worked for generations, how should brands respond?

The Classic Car Story, In Transition

While it’s true that plenty of people across age groups still buy cars, there are several trends that point to serious changes in the way people perceive cars and engage with them.

For starters, more and more teenagers are deciding not to get driver’s licenses. According to a study by Michael Sivak and Brandon Schoettle at the University of Michigan Transportation Research Institute, just 24 percent of 16-year-olds had a driver’s license in 2014—a big drop from 1983, when 46 percent did. Older teens showed a similar decline. Sixty-nine percent of 19-year-olds had a driver’s license in 2014, versus 87 percent in 1983.

In fact, people across ages are forgoing driver’s licenses. The same study found for people aged 16 to 44, the percentage who have driver’s licenses has decreased versus years ago.

Given the downward trend in driver’s licenses among younger people, it’s not surprising that car ownership is changing, too. Although millennials are still purchasing cars—and at higher rates than during the recession—car ownership is still lower than it was back in 2000. The numbers also suggest that young people are choosing to delay buying cars, just as many are choosing to delay moving out of the house or getting married, according to the Los Angeles Times.

What’s more, the relationship teenagers and millennials have with cars—the story they tell themselves about car ownership and what it means—may have fundamentally changed. But what are the reasons driving this change?

“Millennials buy cars more pragmatically. Maybe they missed that moment as teenagers when you deeply fall in love with cars, or a car, or personal autonomous transportation,” said John Paul MacDuffie, management professor at the Wharton School of the University of Pennsylvania, in a story forKnowledge@Wharton. “And they are forever going to be more on the pragmatic car-as-commodity, car-as-appliance part of the equation.”

Increasingly, young people see driving as a hassle. In another survey from researchers Sivak and Schoettle, the top three reasons young adults ages 18 to 39 gave for not getting driver’s licenses were “too busy or not enough time to get a driver’s license” (37 percent), “owning and maintaining a vehicle is too expensive”(32 percent), and “able to get transportation from others” (31 percent).

When teens and millennials do need to get somewhere, they seem less averse to having a friend or a parent drive them. Options like public transportation and ride-sharing services like Uber and Lyft diminish the necessity of buying a car.

Others postulate that mobile devices and the Internet are to blame. Because teens can connect socially via apps and messaging, they no longer need to drive somewhere to get that social experience in person. A survey by KRC Research and Zipcar seems to confirm the idea: Researchers asked participants to what extent they agreed with the statement, “With access to social networking sites such as Facebook and Twitter, text messaging and online gaming, I sometimes choose to spend time with friends online instead of driving to see them.” Over half of 18- to 34-year-olds said they agreed, the highest share among any other age group, according to a report from Frontier Group and the U.S. PIRG Education Fund.

When and if they decide to buy, millennial motivations seem to be different than those of previous generations. Environmentally conscious drivers may seek eco-friendly cars. Budget-conscious millennials want affordable, practical options, given that many must balance car ownership with other financial stressors like student loans.

Shifting Gears

The data above point to major disruptions in the typical automobile narrative in America. Getting a driver’s license used to be a rite of passage for teenagers, owning a car a major life event. If attitudes toward cars have changed permanently, how is the auto industry changing its millennial marketing plan and its brand storytelling strategy?

For proof that millennials are radically shifting the car-ownership story, look no further than Honda’s marketing campaign for its Clarity Electric vehicle. Gone are the iconic shots of the car on the open road or in a cosmopolitan city. Instead, the campaign’s brightly colored animations center on pithy messages with an environmental tilt, dubbed “The ABCs of a Brighter Future.” These “ABCs,” which are hosted on their own Instagram account, include carpooling, enjoying nature, and, curiously, harvesting yucca from the backyard garden. Car as your ticket to freedom? Maybe not. According to this narrative, Honda is your choice if you’re environmentally conscious, practical, socially responsible, and possibly also into container gardening.

As messaging about cars has changed, so too have the channels brands use to reach millennials. A recent Suburu campaign utilized user-generated content and social media influencers to promote its millennial-focused Impreza. The #MeetanOwner campaign boasted 20 Instagram influencers, including photographers, athletes, and musicians, to foster positive brand sentiment. Potential car buyers could visit meetanowner.com to check out photo and video testimonials from Suburu owners and even ask them questions about their cars. What’s striking about the drivers’ stories is that they all live active, passionate lifestyles, and the vehicles they own serve to facilitate those passions (note that the act of driving itself is no longer the passion). Suburu stands out from the pack in developing an innovative way of leveraging user-generated and influencer content to help share its brand story. The campaign earned over 1.9 million likes as a result, according to Mediakix.

From Automaker to Tech Leader

In the future, the narrative surrounding car ownership could change even more dramatically. As Google, Tesla, and Apple develop driverless and electric vehicles, buying a car could become akin to buying an iPhone. Instead of a rite of passage story, people will buy cars because they seek utility and technological innovation. The companies that best position themselves as the vanguard of the latest and greatest technology—supporting not just the vehicles themselves but rather the entire digital vehicle ecosystem—will find themselves winning the game of powerful brand storytelling.

Already, traditional car makers are showing signs of moving in the direction of tech leader. Cadillac, BMW, and Honda are creating car-sharing programs or developing cars specifically for car-sharing, hoping to compete with millennial-friendly Uber and Lyft, according to The Verge. Ford is snapping up tech talent in order to have a hand in every aspect of the self-driving industry, including the software used by driverless cars and the services related to them, according to the New York Times.

In the future, choosing a car or a ride-sharing service may be as much about choosing the technology platform as it is about choosing the actual car model. As a result, brand stories will shift toward emphasizing their prowess as tech leaders versus showcasing the actual experience of driving or riding in a car. Consider Elon Musk’s recent gambit: The CEO sent a cherry red sports car into space as the payload for the flight of the Falcon Heavy rocket, all captured in a 43-minute webcast that drew millions of viewers, according to Bloomberg. The point of this marketing stunt isn’t to promote the specific Tesla convertible that was sent into space or even the SpaceX rocket. It’s about solidifying Tesla’s and Elon Musk’s position as brands on the technological cutting edge.

While America’s relationship with cars may be changing—and with it, the stories that we tell ourselves about driving and buying cars—at the end of the day, plenty of people still want and need vehicles. The old story about driving and owning a car as a rite of passage may not resonate with today’s younger drivers. But that doesn’t preclude new stories from forming about cars. In the future, the story driving our engagement with cars may have more to do with technology and practical concerns. Brand stories may change after an industry disruption, but for automakers, it’s far from the end of the road.

09 February 2019 | Krystal Overmyer | skyword.com

John Dingell’s devotion to the auto industry came with a price

John Dingell was a staunch defender of the auto industry, a statement that perhaps undersells the impact of a man credited with helping save the industry during its darkest days.

As the longest-serving member of Congress, Dingell, who died Thursday, had a role in shaping American life through legislative efforts involving health care, the environment and civil rights, but as a bulldog for the auto industry and its workers, the Dearborn Democrat’s efforts were both applauded and criticized.

Marick Masters, a business professor at Wayne State University and director of the Labor Studies Center, said Dingell was a champion of the auto industry because he was a champion of working people.

“He believed the auto industry was essential to building a middle class and a high quality of life for working people in Michigan and across the country,” Masters said. “That’s why he wanted to protect it to the greatest extent possible.”

The same values drove the commitment to civil rights and social justice for African-Americans, many of whom worked in the factories, said Masters, 65. “Two things that really stand out to me about John Dingell would be his commitment to people and treating people with dignity and respect regardless of their status in life.”

Kristin Dziczek, vice president of the Industry, Labor & Economics Group at the Center for Automotive Research in Ann Arbor, said Dingell’s role in saving the auto industry simply can’t be overstated.

“John Dingell was instrumental to saving Chrysler and General Motors in 2009,” Dziczek said.

Very simply, Dziczek explained, too few lawmakers had factories in their districts and they didn’t understand the importance of the legislation being crafted during the Great Recession bailout. That effort provided approximately $80 billion — of which about $70 billion was recovered — for GM, Chrysler and other entities.

Allowing them to collapse, economists believed, “would have caused the entire industry to collapse and thrown the Midwest into a deep depression,” according to previous Free Press reporting.

“You needed John Dingell’s leadership in the House to get that deal done,” said Dziczek, who had known Dingell since her time as a congressional staffer in the 1990s and worked directly with him in her role at the Center for Automotive Research.

Dingell’s defense of the auto industry did not make him a beloved figure everywhere, as noted in a Wall Street Journal obituary:

“His closeness to the auto industry — some environmentalists called him ‘Dirty Dingell’ or ‘Tailpipe Johnny’ — was seen as a factor in his unceremonious removal from the (House Energy and Commerce) committee’s chair” in 2008.

Legendary consumer advocate Ralph Nader, in a 2014 Facebook post ahead of Dingell’s pending retirement from Congress, referenced Dingell’s “vigorous oversight and investigations of federal departments and agencies that were lax, riven with conflicts of interest, or mistreated whistle-blowers” but also the “darker side” to his liberal image.

“He was totally and cruelly indentured to the auto industry even though he was from an overwhelmingly safe Democratic district. More than any other lawmaker, Democratic or Republican, he fought to make sure that the auto Goliaths got their way in Congress and at the (Environmental Protection Agency) and the Department of Transportation,” according to the Nader post.

Nader said Dingell’s efforts cost the UAW tens of thousands of jobs.

“In the greatest ironies of his lengthy career, he helped mightily in sheltering the technological stagnation of Detroit’s auto barons from innovation-advancing regulation that eventually cost them massive market share to more fuel efficient and higher quality foreign imports from Germany and Japan,” Nader wrote.

Intense questioning

Joan Claybrook, who was administrator of the National Highway Traffic Safety Administration in the Carter administration and is a current board member of Advocates for Highway and Auto Safety, described Dingell as a “tough cookie, no doubt about it.”

Claybrook said she and Dingell had a “very respectful” relationship, but they also fought.

When Dingell wanted information he often sent one of his infamous “Dingell-grams,” which might include 1,400 questions.

“He was very intent on making sure I didn’t do anything to hurt the auto industry. He viewed that as his role as a member of Congress in Dearborn and his obligation,” Claybrook said.

However, she said Dingell was not opposed to improving vehicle safety. Claybrook noted that in 2005 her organization placed an ad in the Dearborn Press & Guide thanking Dingell for his efforts on legislation to, among other things, help prevent fatal rollover crashes.

“He knew that safety was important, but he also made it clear that we had to fight to get the standards issued and had to take the industry views into consideration,” Claybrook said.

Dingell had pushed back against complaints that he was too close to the auto industry, especially through his marriage to Deborah Insley, now U.S. Rep. Debbie Dingell, D-Dearborn, who had work and family ties to General Motors.

“I was fighting for autoworkers long before I met Deborah,” according to a Washington Post obituary referencing comments he made to the paper in 2010. “The fact is that I am not married to the auto industry, but I am elected to represent the people of Michigan and in our part of the country. My people live and die by the success of the auto industry and manufacturing.”

Dingell’s environmental evolution

Harley Shaiken, a professor at the University of California-Berkeley, said Dingell had an open mind.

“Initially, he was skeptical on environmental issues, but when he understood the severity of the threats, he embraced issues and was able to carry them through in legislation. He made the industry accept something they were reluctant to go for. Even though environmentalists may feel he didn’t go far enough, he went much further than what would’ve been expected,” Shaiken said.

Shaiken, who specializes in labor and the global economy, knew Dingell personally.

“John Dingell was a deep advocate of autoworkers and workers more generally,” Shaiken said. “He understood you had to defend the industry to protect the jobs and the livelihoods of those workers. He did it in a tireless, accessible way. He knew how to compromise and, when necessary, stand his ground.”

Most importantly, Dingell never lost touch with his roots, said Shaiken, 73, whose grandfather moved from Ohio to Detroit to earn $5 a day at Ford’s Highland Park plant and spent most of his 33 years on the line at the Rouge.

“You could find John Dingell at the UAW Local 600 Christmas party or welcoming the assembly of the Ford Fusion at the Flat Rock Assembly Plant. The appreciation of his achievements didn’t simply come in executive suites but from deep affection among union reps and workers in the plants,” Shaiken said.

John McElroy, a longtime industry analyst and host of “Autoline After Hours,” grew to know Dingell through their media appearances together.

“I’m kind of a defender of the automotive industry, too. Especially as Detroit and GM and Chrysler were going into bankruptcy,” said McElroy, who’s 65. “I was one of the lone (voices) out there going, ‘Look, we’re going to get money from Congress, restructure and come back and set sales records.’ Because I was so out there, that’s probably how John knew who I was. He had seniority and clout and gravitas, but he was very approachable.”

No one can really quantify the impact Dingell had on the lives of Michigan families and the people of America, McElroy said.

“He’s got his fingerprints on 30 or 40 years’ worth of legislation,” said McElroy, whose father worked at Ford.

He understood the industry

The Center for Automotive Research’s David Cole, 81, has known Dingell for “many years” and had a lot of interaction with him. Cole said Dingell was crucial to helping pass policy to protect the auto industry even in times of uncertainty such as when Volkswagen introduced the Beetle and Asian automakers entered the U.S. market. Both instances disrupted sales of U.S. automakers.

“He always understood the importance of the industry,” said Cole, who is chair emeritus of the Ann Arbor-based center.

For example, the economic multiplier for each job in the auto industry is 10, said Cole. That means there are nine other jobs that flow from each direct industry job. The economic multiplier for a typical job on Wall Street is only two.

“Most people are unaware that the economic multiplier in the auto industry is more than just the industry, there are a lot more jobs that are really important,” said Cole. “John was aware of that.”

So aware of it that despite being a Democrat and a UAW supporter, if Dingell saw that a UAW benefit would hurt the overall industry, he was the “voice of reason” with UAW leaders to back down, Cole said.

Dingell’s long tenure in Congress gave him a deep understanding of politics and how to work it, too, Cole said.

“The experience he developed over time and the wisdom that came with it was really important,” said Cole. “It made him really understand his role as a political leader to accomplish big things. Debbie is following on that path too.”

Dingell’s work on the Clean Air Act led to the invention of catalytic converters and a dramatic reduction in vehicle emissions, Cole said.

“It was done at a pace that the industry could meet it as automakers did research and brought this technology into play,” Cole said. “Without someone like John we would have had much more political chaos in the auto industry, in my opinion. You didn’t see him in a table-pounding discussion. He was subdued but a strong personality.”

Dave Sullivan, 39, an auto industry analyst who worked in the factory at Ford Motor Co., and in management, met Dingell many times at social events and remembers stories growing up when his father worked at Ford.

“John Dingell, while some may not have agreed with everything he stood for, he was a united voice for Detroit’s union members, salaried ranks and suppliers,” Sullivan said. “The timing and reasoning for losing his seat in 2008 came down to his stubbornness to put Detroit first, even as Detroit’s darkest days were still yet to come. Dingell put Detroit on a pedestal, ahead of the environment, and gave Detroit a voice even as the population dwindled and The Big Three’s market share shrank.”

Sullivan, now a global executive in the e-mobility industry, said, “Detroit lost their biggest advocate in D.C. this week. You didn’t have to know him personally to know what he stood for.”

08 February 2019 | Eric D. Lawrence | Detroit Free Press

https://www.freep.com/story/money/cars/2019/02/08/john-dingell-congress-auto-industry/2811869002/

Supplier cyber risk concerns auto industry

Dive Brief:

  • In a new study by Synopsys and SAE International, 73% of respondents expressed concern about the cybersecurity of third-party providers, yet only 44% said their organization imposes cybersecurity requirements for products from upstream providers.
  • Securing the Modern Vehicle: A Study of Automotive Industry Cybersecurity Practices also found 30% of organizations don’t have an established cybersecurity program or team, and 63% test less than half of the automotive technology they develop for security vulnerabilities.
  • “This study underscores the need for a fundamental shift — one that addresses cybersecurity holistically across the systems development lifecycle and throughout the automotive supply chain,” Andreas Kuehlmann, co-general manager of the Synopsys Software Integrity Group, said in the release.

Dive Insight:

The automotive supply chain is long and complex. A break in the chain at a small, tier 3, single-part producer can be disastrous.

There are plenty of portals and opportunities for “bad guys” to breach security. According to the EY Global Information Security Survey 2018-19, 1.95 billion records containing personal information and other sensitive data were compromised between January 2017 and March 2018, and 550 million phishing emails were sent out by a single campaign during the first quarter of 2018. The average cost of a data breach last year, EY reported, was $3.62 million.

Opportunities do exist for automotive supply chains to protect themselves. One organization, the 3,000-member Automotive Industry Action Group (AIAG), last year released the Cyber Security 3rd Party Information Securitypublication to support industry efforts to protect sensitive data by outlining a unified set of cybersecurity guidelines for automotive trading partners.

Its strategies are based on industry best practices and standards. The National Institute of Standards and Technology (NIST) helped create the document. Also participating were security leaders from General Motors, Ford, Honda and Fiat-Chrysler, with additional input from Toyota, Nissan, Caterpillar, Bosch, Continental and Magna International.

The guide covers such areas as access controls, data encryption, vulnerability management, security audits of suppliers/third parties, data retention and disposal and security investigations. Along with this framework, each original equipment manufacturer (OEM) can take additional measures to increase security of its suppliers and their supply chains.

“Over the course of the past 25 years, we have seen a remarkable shift in enterprise value from tangible to intangible assets. Data is the new currency,” J. Scot Sharland, executive director of AIAG, said when the publication was announced. “As such, more effective command and control of data has become an enterprise risk management priority.”

07 February 2019 | Barry Hochfelder | Supply Chain Dive

https://www.supplychaindive.com/news/auto-industry-supply-chain-cyber-risk/547929/

Mercedes-Benz Cars seeks to strengthen its supply chain

Mercedes-Benz Cars has said it is advancing its ‘Case’ (connectivity, autonomous, shared & services, and electric) strategy by making its supplier network more international and flexible, and placing greater emphasis on localisation.

In addition to expanding its 2,000-strong global network of suppliers, the German OEM is pursuing a policy of sourcing parts wherever its vehicles are produced, to minimise its vulnerability to political developments such as trade conflicts.

“At Mercedes-Benz Cars, we generally aim to increase the degree of localisation wherever we produce,” confirmed Wilko Stark (pictured), purchasing and supplier quality member on the divisional board. “A central building block for this is the local proximity of suppliers to the production plants, so that parts can be produced and called up almost synchronously with production.

“We are already working with many global partners to achieve this. We give local and new partners the opportunity to position themselves with us internationally,” added Stark.

Using China as an example, the company said it was using approximately 300 local suppliers to date, while the proportion of local sourcing for production at the Tuscaloosa plant in Alabama was higher than was currently required in the US, and the share of locally produced components was scheduled to “significantly” increase in the next five years.

“Growing flexibility in the supplier network is required not only by the transformation to electric mobility but also by volatile markets, by Mercedes-Benz Cars’ wide product range, and by the high variance of ever new functions,” stated the OEM.

“Together with our partners, we have made our supplier network more flexible in order to compensate for fluctuating volumes,” said Stark.

A flexible supply chain is also required to meet the company’s production strategy, as it needs to be able to switch between conventional and electric vehicles. By bundling component orders for conventional and electric vehicles with the same supplier, such as seats or head units, it is possible to react swiftly to customer demand and change between drive technologies. That provides greater planning security for suppliers and for Mercedes-Benz itself, said the OEM.

“Procurement makes a significant contribution to the implementation of the Case strategy,” said Stark.

An example of the importance parent company Daimler puts on procurement was its decision last year to buy battery cells costing more than €20 billion ($22.9 billion) over the next decade as it prepares to introduce 130 electrified variants of Mercedes-Benz cars by 2022.

Mercedes-Benz said it was also looking to sharpen up on efficiency gains through technical innovations developed jointly with suppliers.

05 February 2019 | Steve Garnsey | Automotive Logistics

https://automotivelogistics.media/news/mercedes-benz-cars-seeks-strengthen-supply-chain

Auto execs decry financial losses due to tariffs

Dive Brief:

  • Fiat Chrysler, Ford, GM, Toyota and others are facing financials losses because tariffs have raised costs of steel and aluminum, Reuters reports, from the Detroit Auto Show.
  • Ford has forecast weaker-than-expected fourth-quarter profit levels, indicating that global tariffs could erode 2019 earnings by about $700 million, according to Reuters. A Toyota executive said the company raised prices three times because of higher tariff costs.
  • In addition to the pain of tariffs, the government shutdown is delaying certification for one of Fiat Chrysler’s new heavy-duty pickup truck models.

Dive Insight:

The uncertainty surrounding trade negotiations is weighing heavily on automakers. “Certainty is something we really desire because of our product lead times,” Ford Executive Chairman Bill Ford Jr. told Reuters. “We don’t have that right now.”

The trickle-down effect of the tariffs and shutdown is already being felt. The Council on Foreign Relations predicted 40,000 automotive jobs could be lost because of the 25% steel tariff. GM alone announced plans to cut 15,000 jobs.

A study by the Center for Automotive Research (CAR) predicts new car prices could rise an average of $4,400, with even U.S.-built vehicles increasing $2,270 because they still use imported parts and materials. The numbers it cites definitely give automakers — and consumers — cause for concern. For example, CAR, predicts a 25% tariff on automotive and parts imports (such as steel) will cost 714,700 U.S. jobs and a $59.2 billion lower U.S. economic output. Auto dealerships, it said, could lose as many as 117,500 jobs and $66.5 billion in revenue.

“Tariffs and quotas on automobiles and automotive parts will not strengthen the U.S. economy or make U.S. automakers and suppliers more competitive in the global market,” Carla Bailo, CAR’s CEO and president, said in a press release announcing the study, which was commissioned by the National Automobile Dealers Association (NADA).

18 January 2019 | Barry Hochfelder | Supply Chain Dive

https://www.supplychaindive.com/news/auto-executives-ford-GM-Toyota-financial-losses-tariffs/546426/

The 30K piece puzzle: Brexit and the auto industry

This article was first published in Prospect’s “The future of the automotive industry.” View the magazine edition here.

Planning for risk events is a major part of any business strategy, whether the origin of that danger is financial, cyber, political or a natural disaster.

Supply chain managers are particularly good at risk management strategy, due to the nature of moving goods. As an executive in the logistics industry once said, not all risk managers understand supply chains, but every supply chain manager understands risk.

Here in the U.S., trade tariffs are at the top of the agenda. But they are not the only geopolitical risk causing anxiety among supply chain managers. If Brexit negotiators don’t reach a deal by the end of March 2019, automotive supply chains throughout Europe will see significant disruption.

The auto supply chain is especially at risk because of the complexity of the final product. Think about a car and all of its parts — the engine, tires and car body. But the small parts are just as critical, such as the alternator and timing belt, not to mention added gadgets and gizmos, from bluetooth-enabled audio to heated seats.

A no-deal Brexit would hit automakers’ top and bottom lines and could cost them 2.8 million sales over the next two years. PA Consulting estimates that a “Hard Brexit” would increase the costs of a car by £2,000 ($2,515). The Society of Motor Manufacturers and Traders (SMMT) has launched Brexit aid packages and readiness programs to help British auto businesses to plan for the risk event.

By some estimates, the average car has 30,000 parts — and many of these components come from a variety of suppliers. The same supplier that builds a gear box doesn’t also make seat belts.

With barriers to free trade in place, auto manufacturers will be forced to rethink the sourcing, production, shipping and warehousing aspects of their supply chains.

If a U.K. automaker imports a part from a supplier in Germany, for example, a hard Brexit could result in the automaker having to pay an import tax on that product. This would raise costs for the company, which would either erode operating margin or get passed through to the consumer.

Customs clearances may also delay component delivery. Seaports in western Europe are expected to see bottlenecks and delays as they rework their operations with new customs and trade regulations in place.

Aston Martin is concerned what kind of impact the bottlenecks would have on its supply chain — so much so that the company’s chief executive said he would consider transporting more components by air than by sea. Shipping components by air is significantly more expensive, but it’s a risk Aston Martin is willing to take to ensure it can continue to meet demand.

Some companies are beginning to stockpile parts. But stockpiling costs businesses in warehousing and storage — and supplies won’t last forever.

Other companies have decided temporarily to halt production around the Brexit deadline, waiting for the wrinkles to be ironed out before resuming operations. BMW’s factory in Oxford will close for at least one month, starting on April 1, 2019 to minimize disruptions.

In 2016, the U.K. auto industry exported £14 billion ($17.6 billion) worth of products to the EU. Export supply chains face similar issues as import supply chains.

Auto suppliers stand to lose in a no-deal situation if they supply to car manufacturers with production facilities in mainland Europe. The U.K. auto industry exports £3.4 ($4.3) billion worth of parts to Europe each year, according to the SMMT. Some European companies are looking at contingency plans to source more parts from mainland suppliers, avoiding possible hiccups at the border.

Cars fully assembled in the U.K. but then exported and distributed to other countries could face tariffs and these could result in automakers moving their production facilities to avoid paying duties.

full 80% of the U.K.’s car production is exported, and of that, more than half is sent to the EU. If automakers continue to export from the U.K., they may incur significant costs from tariffs, which they will likely absorb in the price of the finished car, and that could make the vehicle less appealing to consumers who are unwilling to pay a higher price point, resulting in reduced sales.

As the clock is ticking down to the Brexit deadline, businesses and consumers alike are eagerly watching negotiations, awaiting the outcome. Automakers are hedging their bets and planning for what they consider a worst-case scenario — because they’re not willing to be blindsided by this giant risk.

03 January 2018 | Shefali Kapadia | Supply Chain Dive

https://www.supplychaindive.com/news/auto-industry-brexit-supply-chain-risk/545135/